Many iPhone 5 Buyers Own a Damaged iPhone 4S

By Quentin Fottrell

Some 30% of iPhone users damaged their devices within the past 12 months, according to a study by gadget insurer Square Trade. The phones get far more scratched, soaked and abused than iPads, only 10% of which were damaged during the same time period, based on data from 2,000 customers. Perhaps part of the reason some 2 million new iPhone 5s were preorderedin the first 24 hours is that many customers didn’t have a choice: Their older models needed replacing.

Despite growing concerns about iPhone thieves on subway trains and street corners, the latest research suggests that accidental damage is 10 times more likely than loss or theft. “We were astonished at how many people drop their phones in the toilet,” says Ty Shay, chief marketing officer at SquareTrade.

Many of the iPhone aficionados first in line to upgrade may be carrying around models with broken screens, says Yung Trang, president of deal aggregator TechBargains.com. Around 11% of iPhone owners are currently walking around with a device that is cracked, the SquareTrade study says, while 6% have taped up their iPhone as they wait for the new iPhone 5 or to qualify for an upgrade. Younger consumers are even clumsier: 50% of iPhone owners under the age of 35 have damaged their gadgets, the study says.

Loving one’s iPhone to death is also an expensive business. Broken iPhones have cost Americans an estimated $5.9 billion since they were launched in 2007, the study says. That includes the cost of repairs, replacements and insurance deductibles for “cracked, dropped, pummeled, kicked and water-damaged iPhones.” Apple doesn’t cover for breakages or careless handling unless the customer takes out additional insurance, and it charges $600 for an iPhone without a contract. (Apple did not respond to request for comment.)

Manufacturers are locked in a race to squeeze faster processors into increasingly thin cases, experts say. “There is little regard for durability,” Ty says. In fact, the iPhone 5 is 18% thinner and 20% lighter than the iPhone 4S, and Apple also widened the iPhone 5 screen to 4 inches from 3.5 inches, making it better to view videos, but more susceptible to cracking, Trang says. On the other hand, unlike the prior two iPhones, which had glass on both sides, the iPhone 5 only has glass on the front, which may make it less susceptible to damage.

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Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to quentin.fottrell@dowjones.com or tweet @SMPayDirt.